Reserve Bank of India lowered repo rate by 25 basis points, now at 7.5 per cent

Reserve Bank of India (RBI) cuts its policy repo rate by 25 basis points to 7.5 per cent on March 4, 2015. This is the second cut of it’s key policy rate this year on the back of easing inflation and a government commitment to fiscal discipline. RBI kept other rates unchanged.

The RBI had lowered interest rates by 25 bps on Jan 15. Both rate cuts this year have took place outside of the central bank’s scheduled policy review meetings.

The rate cut marks a vote of faith in the government, which on Saturday pledged to be fiscally responsible but said it would take an additional year to meet a fiscal deficit target of 3 per cent of gross domestic product.